CASE NO.
139 SPOUSES MINIANO VS CONCEPCION
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 172825               October 11, 2012
SPOUSES MINIANO B. DELA CRUZ and LETA L. DELA CRUZ, Petitioners,
vs.
ANA MARIE CONCEPCION, Respondent.
DECISION
Assailed in this petition for review on certiorari under Rule 45
of the Rules of Court filed by petitioners spouses Miniano B.
Dela Cruz and Leta L. Dela Cruz against respondent Ana Marie
Concepcion are the Court of Appeals (CA) Decision 1 dated
March 31, 2005 and Resolution2 dated May 24, 2006 in CA-
G.R. CV No. 83030.
The facts of the case are as follows:
On March 25, 1996, petitioners (as vendors) entered into a
Contract to Sell3 with respondent (as vendee) involving a
house and lot in Cypress St., Phase I, Town and Country
Executive Village, Antipolo City for a consideration of
P2,000,000.00 subject to the following terms and conditions:
a) That an earnest money of P100,000.00 shall be
paid immediately;
b) That a full down payment of Four Hundred
Thousand Pesos (P400,000.00) shall be paid on
February 29, 1996;
c) That Five Hundred Thousand Pesos (P500,000.00)
shall be paid on or before May 5, 1996; and
d) That the balance of One Million Pesos
(P1,000,000.00) shall be paid on installment with
interest of Eighteen Percent (18%) per annum or
One and a half percent (1-1/2 %) interest per month,
based on the diminishing balance, compounded
monthly, effective May 6, 1996. The interest shall
continue to run until the whole obligation shall have
been fully paid. The whole One Million Pesos shall be
paid within three years from May 6, 1996;
e) That the agreed monthly amortization of Fifty
Thousand Pesos (P50,000.00), principal and interest
included, must be paid to the Vendors, without need
of prior demand, on or before May 6, 1996, and
every month thereafter. Failure to pay the monthly
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amortization on time, a penalty equal to Five Percent
(5%) of the amount due shall be imposed, until the
account is updated. In addition, a penalty of One
Hundred Pesos per day shall be imposed until the
account is updated;
f) That after receipt of the full payment, the Vendors
shall execute the necessary Absolute Deed of Sale
covering the house and lot mentioned above x x x 4
Respondent made the following payments, to wit: (1)
P500,000.00 by way of downpayment; (2) P500,000.00 on
May 30, 1996; (3) P500,000.00 paid on January 22, 1997; and
(4) P500,000.00 bounced check dated June 30, 1997 which
was subsequently replaced by another check of the same
amount, dated July 7, 1997. Respondent was, therefore, able
to pay a total of P2,000,000.00.5
Before respondent issued the P500,000.00 replacement
check, she told petitioners that based on the computation of
her accountant as of July 6, 1997, her unpaid obligation which
includes interests and penalties was only
P200,000.00.6 Petitioners agreed with respondent and said "if
P200,000.00 is the correct balance, it is okay with us." 7
Meanwhile, the title to the property was transferred to
respondent. Petitioners later reminded respondent to pay
P209,000.00 within three months.8 They claimed that the said
amount remained unpaid, despite the transfer of the title to
the property to respondent. Several months later, petitioners
made further demands stating the supposed correct
computation of respondent’s liabilities.9 Despite repeated
demands, petitioners failed to collect the amounts they
claimed from respondent. Hence, the Complaint for Sum of
Money With Damages10 filed with the Regional Trial Court
(RTC)11 of Antipolo, Rizal. The case was docketed as Civil Case
No. 98-4716.
In her Answer with Compulsory Counterclaim,12 respondent
claimed that her unpaid obligation to petitioners is only
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P200,000.00 as earlier confirmed by petitioners and not
P487,384.15 as later alleged in the complaint. Respondent
thus prayed for the dismissal of the complaint. By way of
counterclaim, respondent prayed for the payment of moral
damages and attorney’s fees. During the presentation of the
parties’ evidence, in addition to documents showing the
statement of her paid obligations, respondent presented a
receipt purportedly indicating payment of the remaining
balance of P200,000.00 to Adoracion Losloso (Losloso) who
allegedly received the same on behalf of petitioners.13
On March 8, 2004, the RTC rendered a Decision 14 in favor of
respondent, the dispositive portion of which reads:
WHEREFORE, premises considered, this case is hereby
DISMISSED. The plaintiff is hereby ordered to pay the
defendant’s counterclaim, amounting to wit:
a) P300,000 as moral damages; and
b) P100,000 plus P2,000 per court appearance as
attorney’s fees.
SO ORDERED.15
The RTC noted that the evidence formally offered by
petitioners have not actually been marked as none of the
markings were recorded. Thus, it found no basis to grant their
claims, especially since the amount claimed in the complaint
is different from that testified to. The court, on the other
hand, granted respondent’s counterclaim.16
On appeal, the CA affirmed the decision with modification by
deleting the award of moral damages and attorney’s fees in
favor of respondent.17 It agreed with the RTC that the
evidence presented by petitioners cannot be given credence
in determining the correct liability of
respondent.18 Considering that the purchase price had been
fully paid by respondent ahead of the scheduled date agreed
upon by the parties, petitioners were not awarded the
excessive penalties and interests.19 The CA thus maintained
that respondent’s liability is limited to P200,000.00 as
claimed by respondent and originally admitted by
petitioners.20 This amount, however, had already been paid by
respondent and received by petitioners’
representative.21 Finally, the CA pointed out that the RTC did
not explain in its decision why moral damages and attorney’s
fees were awarded. Considering also that bad faith cannot be
attributed to petitioners when they instituted the collection
suit, the CA deleted the grant of their counterclaims. 22
Aggrieved, petitioners come before the Court in this petition
for review on certiorari under Rule 45 of the Rules of Court
raising the following errors:
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I.
"THE TRIAL COURT ERRED IN DISMISSING THE
COMPLAINT ON THE GROUND THAT PLAINTIFF
FAILED TO FORMALLY OFFER THEIR EVIDENCE AS
DEFENDANT JUDICIALLY ADMITTED IN HER ANSWER
WITH COMPULS[O]RY COUNTERCLAIM HER
OUTSTANDING OBLIGATION STILL DUE TO
PLAINTIFFS AND NEED NO PROOF.
II.
THE TRIAL COURT ERRED IN DISMISSING THE
COMPLAINT FOR ALLEGED FAILURE OF PLAINTIFFS
TO PRESENT COMPUTATION OF THE AMOUNT
BEING CLAIMED AS DEFENDANT JUDICIALLY
ADMITTED HAVING RECEIVED THE DEMAND LETTER
DATED OCTOBER 22, 1997 WITH COMPUTATION OF
THE BALANCE DUE.
III.
THE TRIAL COURT ERRED IN DISMISSING THE
COMPLAINT ON THE GROUND THAT THE
DEFENDANT FULLY PAID THE CLAIMS OF PLAINTIFFS
BASED ON THE ALLEGED RECEIPT OF PAYMENT BY
ADORACION LOSLOSO FROM ANA MARIE
CONCEPCION MAGLASANG WHICH HAS NOTHING
TO DO WITH THE JUDICIALLY ADMITTED
OBLIGATION OF APPELLEE."23
Invoking the rule on judicial admission, petitioners insist that
respondent admitted in her Answer with Compulsory
Counterclaim that she had paid only a total amount of P2
million and that her unpaid obligation amounts to
P200,000.00.24 They thus maintain that the RTC and the CA
erred in concluding that said amount had already been paid
by respondent. Petitioners add that respondent’s total
liability as shown in the latter’s statement of account was
erroneously computed for failure to compound the monthly
interest agreed upon.25 Petitioners also claim that the RTC and
the CA erred in giving credence to the receipt presented by
respondent to show that her unpaid obligation had already
been paid having been allegedly given to a person who was
not armed with authority to receive payment. 26
The petition is without merit.
It is undisputed that the parties entered into a contract to sell
a house and lot for a total consideration of P2 million.
Considering that the property was payable in installment,
they likewise agreed on the payment of interest as well as
penalty in case of default. It is likewise settled that
respondent was able to pay the total purchase price of P2
million ahead of the agreed term. Afterwhich, they agreed on
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the remaining balance by way of interest and penalties which
is P200,000.00. Considering that the term of payment was
not strictly followed and the purchase price had already been
fully paid by respondent, the latter presented to petitioners
her computation of her liabilities for interests and penalties
which was agreed to by petitioners. Petitioners also
manifested their conformity to the statement of account
prepared by respondent.
In paragraph (9) of petitioners’ Complaint, they stated that:
9) That the Plaintiffs answered the Defendant as follows: "if
P200,000 is the correct balance, it is okay with us." x x x. 27
But in paragraph (17) thereof, petitioners claimed that
defendant’s outstanding liability as of November 6, 1997 was
P487,384.15.28 Different amounts, however, were claimed in
their demand letter and in their testimony in court.
With the foregoing factual antecedents, petitioners cannot be
permitted to assert a different computation of the correct
amount of respondent’s liability.
It is noteworthy that in answer to petitioners’ claim of her
purported unpaid obligation, respondent admitted in her
Answer with Compulsory Counterclaim that she paid a total
amount of P2 million representing the purchase price of the
subject house and lot. She then manifested to petitioners and
conformed to by respondent that her only balance was
P200,000.00. Nowhere in her Answer did she allege the
defense of payment. However, during the presentation of her
evidence, respondent submitted a receipt to prove that she
had already paid the remaining balance. Both the RTC and the
CA concluded that respondent had already paid the
remaining balance of P200,000.00. Petitioners now assail this,
insisting that the court should have maintained the judicial
admissions of respondent in her Answer with Compulsory
Counterclaim, especially as to their agreed stipulations on
interests and penalties as well as the existence of outstanding
obligations.
It is, thus, necessary to discuss the effect of failure of
respondent to plead payment of its obligations.
Section 1, Rule 9 of the Rules of Court states that "defenses
and objections not pleaded either in a motion to dismiss or in
the answer are deemed waived." Hence, respondent should
have been barred from raising the defense of payment of the
unpaid P200,000.00. However, Section 5, Rule 10 of the Rules
of Court allows the amendment to conform to or authorize
presentation of evidence, to wit:
Section 5. Amendment to conform to or authorize
presentation of evidence. – When issues not raised by the
pleadings are tried with the express or implied consent of the
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parties, they shall be treated in all respects as if they had
been raised in the pleadings. Such amendment of the
pleadings as may be necessary to cause them to conform to
the evidence and to raise these issues may be made upon
motion of any party at any time, even after judgment; but
failure to amend does not affect the result of the trial of
these issues. If evidence is objected to at the trial on the
ground that it is not within the issues made by the pleadings,
the court may allow the pleadings to be amended and shall
do so with liberality if the presentation of the merits of the
action and the ends of substantial justice will be subserved
thereby. The court may grant a continuance to enable the
amendment to be made.
The foregoing provision envisions two scenarios, namely,
when evidence is introduced in an issue not alleged in the
pleadings and no objection was interjected; and when
evidence is offered on an issue not alleged in the pleadings
but this time an objection was raised.29 When the issue is
tried without the objection of the parties, it should be treated
in all respects as if it had been raised in the pleadings. 30 On
the other hand, when there is an objection, the evidence may
be admitted where its admission will not prejudice him. 31
Thus, while respondent judicially admitted in her Answer that
she only paid P2 million and that she still owed petitioners
P200,000.00, respondent claimed later and, in fact, submitted
an evidence to show that she already paid the whole amount
of her unpaid obligation. It is noteworthy that when
respondent presented the evidence of payment, petitioners
did not object thereto. When the receipt was formally offered
as evidence, petitioners did not manifest their objection to
the admissibility of said document on the ground that
payment was not an issue. Apparently, petitioners only
denied receipt of said payment and assailed the authority of
Losloso to receive payment. Since there was an implied
consent on the part of petitioners to try the issue of payment,
even if no motion was filed and no amendment of the
pleading has been ordered,32 the RTC cannot be faulted for
admitting respondent’s testimonial and documentary
evidence to prove payment.33
As stressed by the Court in Royal Cargo Corporation v. DFS
Sports Unlimited, Inc.,34
The failure of a party to amend a pleading to conform to the
evidence adduced during trial does not preclude adjudication
by the court on the basis of such evidence which may
embody new issues not raised in the pleadings. x x x
Although, the pleading may not have been amended to
conform to the evidence submitted during trial, judgment
may nonetheless be rendered, not simply on the basis of the
issues alleged but also on the issues discussed and the
assertions of fact proved in the course of the trial. The court
may treat the pleading as if it had been amended to conform
to the evidence, although it had not been actually amended.
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x x x Clearly, a court may rule and render judgment on the
basis of the evidence before it even though the relevant
pleading had not been previously amended, so long as no
surprise or prejudice is thereby caused to the adverse party.
Put a little differently, so long as the basic requirements of
fair play had been met, as where the litigants were given full
opportunity to support their respective contentions and to
object to or refute each other's evidence, the court may
validly treat the pleadings as if they had been amended to
conform to the evidence and proceed to adjudicate on the
basis of all the evidence before it. (Emphasis supplied) 35
To be sure, petitioners were given ample opportunity to
refute the fact of and present evidence to prove payment.
With the evidence presented by the contending parties, the
more important question to resolve is whether or not
respondent’s obligation had already been extinguished by
payment.
We rule in the affirmative as aptly held by the RTC and the
CA.
Respondent’s obligation consists of payment of a sum of
money. In order to extinguish said obligation, payment should
be made to the proper person as set forth in Article 1240 of
the Civil Code, to wit:
Article 1240. Payment shall be made to the person in whose
favor the obligation has been constituted, or his successor in
interest, or any person authorized to receive it. (Emphasis
supplied)
The Court explained in Cambroon v. City of Butuan, 36 cited in
Republic v. De Guzman,37 to whom payment should be made
in order to extinguish an obligation:
Payment made by the debtor to the person of the creditor or
to one authorized by him or by the law to receive it
extinguishes the obligation. When payment is made to the
wrong party, however, the obligation is not extinguished as to
the creditor who is without fault or negligence even if the
debtor acted in utmost good faith and by mistake as to the
person of the creditor or through error induced by fraud of a
third person.
In general, a payment in order to be effective to discharge an
obligation, must be made to the proper person. Thus,
payment must be made to the obligee himself or to an agent
having authority, express or implied, to receive the particular
payment. Payment made to one having apparent authority to
receive the money will, as a rule, be treated as though actual
authority had been given for its receipt. Likewise, if payment
is made to one who by law is authorized to act for the
creditor, it will work a discharge. The receipt of money due on
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a judgment by an officer authorized by law to accept it will,
therefore, satisfy the debt.38
Admittedly, payment of the remaining balance of
P200,000.00 was not made to the creditors themselves.
Rather, it was allegedly made to a certain Losloso.
Respondent claims that Losloso was the authorized agent of
petitioners, but the latter dispute it.
Losloso’s authority to receive payment was embodied in
petitioners’ Letter39 addressed to respondent, dated August 7,
1997, where they informed respondent of the amounts they
advanced for the payment of the 1997 real estate taxes. In
said letter, petitioners reminded respondent of her remaining
balance, together with the amount of taxes paid. Taking into
consideration the busy schedule of respondent, petitioners
advised the latter to leave the payment to a certain "Dori"
who admittedly is Losloso, or to her trusted helper. This is an
express authority given to Losloso to receive payment.
Moreover, as correctly held by the CA:
Furthermore, that Adoracion Losloso was indeed an agent of
the appellant spouses is borne out by the following
admissions of plaintiff-appellant Atty. Miniano dela Cruz, to
wit:
Q: You would agree with me that you have authorized this
Doiry Losloso to receive payment of whatever balance is due
you coming from Ana Marie Concepcion, that is correct?
A: In one or two times but not total authority, sir.
Q: Yes, but you have authorized her to receive payment?
A: One or two times, yes x x x. (TSN, June 28, 1999, pp. 16-
17)40
Thus, as shown in the receipt signed by petitioners’ agent and
pursuant to the authority granted by petitioners to Losloso,
payment made to the latter is deemed payment to
petitioners. We find no reason to depart from the RTC and
the CA conclusion that payment had already been made and
that it extinguished respondent's obligations.
WHEREFORE, premises considered, the petition is DENIED for
lack of merit. The Court of Appeals Decision dated March 31,
2005 and Resolution dated May 24, 2006 in CA-G.R. CV No.
83030, are AFFIRMED.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
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